I don't know whether this might be too long or boring, but I've extended the tale further a bit:

Now, price is back at $5000. You want to go short, but big time this time around.

You're going to Mike and borrow the ticket, and to Steve and borrow his ticket, and all your 8 friends (MSetc), and borrow their tickets and sell them to Anna, Betsy, Charlotte, etc (ABC). Now you're short 8 tickets, you'll have to buy back 8 tickets later to give back to your friends (SMe).

However, your hedge fund buddy (HFB) also thinks the price is too high, and wants to sell. He goes to Anna, Betsy, Charlotte etc. and asks whether he could borrow their tickets. Well, why would they give him their tickets? Well, he'll give it back in time, and he'll throw in a 2$ borrow fee for every day he has the tickets borrowed. Sure, they say, and he goes out and sells those 8 tickets to Redditors.

However, turns out that it's an Indy band, and they had only sold 15 tickets in total, 8 to your friends, and 7 to random other people (ROP).

There's a net supply of 15 tix.

Your friends SMe have 0 tickets, have lent 8 tickets, so are long 8 tickets.

You have 0 tickets, have borrowed 8 tickets, so are short 8 tickets. (Replace "borrow 8" by "lent -8", if you want.)

ABC have 0 tickets, have lent 8 tickets, so are long 8 tickets.

HF buddy has 0 tickets, has borrowed 8 tickets, so is short 8 tickets.

Redditors have 8 tickets, haven't borrowed or lent, so are long 8 tickets.

All of the above have a total 8 tickets (Redditors) = 24 long position (SMe, ABC, Redditors) minus 16 short position (You, HFB).

Random other people have the remaining 7 tickets.

Total ticket supply = 15. Total long = 24+7 = 31. Total short = 16. And, 31-16 = 15 net.

This is how short interest (16) can exceed net supply (15).

If the price goes up 10$, the total price of the tickets (=market cap) goes up 150$. The longs win 310$, the shorts lose 160$.

If the price goes down 10$, the total price of the tickets (=market cap) drops 150$. The longs lose 310$, the shorts win 160$.

Ok. Penultimate step.

Now concert comes closer. You owe SME their 8 tickets, and HFBuddy owes ABC their 8 tickets. However, Redditors are not selling their tickets. So, you and HFBuddy go out to random other people (who have 7 tickets in total) and want to buy back 16 tickets! They might give it to you, but when they realise what's going on, they might want $20000 per ticket. Or more! You have to pay up, and what you need is more than what's available on the market!! They won't sell it! Price rises!

That's a short squeeze.

ROP, Redditors, ABC, SME get rich (31 long), and you and HFbuddy lose (16 tix). Hey, you wonder, how can so many people get rich, nearly twice as many as lose? Well, they don't really - remember, 15 people will go to the concert. They won't sell the ticket. They don't care about the price. There is a 15 net supply. Someone ends up with the ticket, with the concert. Not 31 get rich, but 16 get rich, and 16 lose. 15 end up holding the tickets, going to the concert (= being long term share holders.) They might still sell the ticket, then they might win or lose.

Ok. Now, final step.

The Redditors are a fine bunch. They won't sell, and they won't lend their tickets to evil shorters! They like the band, and they will prevail.

But you know, one of the ROP is not that keen on music, and when HFBuddy offers him $5100 for the ticket he bought for $5000, yeah, he sells it. HFBuddy loses a bit, but hey. He gives the borrowed ticket back to Anna, closing this short. So, now he asks her, "would you sell it back to me? $5100 dollars." She is not as keen as the Redditors, and sells it to him. HFBuddy loses a bit, but hey. He gives the ticket back to Betsy. So, now he asks her, "would you sell it back to me? $5100 dollars." .....

Ok, you see where this is going. After a while, he can give back the ticket to Henrietta, and he is out of the short position. Bought 1 Ticket from a ROP, and closed out all his short positions, by buying from the people he had just returned it to. HFBuddy is out of his short, with a bit of a loss.

So, Redditors have 8 tickets left, and they're HODLing, ROP have 6 (since one of them sold out) - and Henrietta has a ticket. You ask Henrietta whether she'd sell it. She does. You take that one ticket and give it to Steve, ask whether he'd sell it back to you. He does. You go to all the other friends MSe friends (except Mike), close out your shorts, and buy it back. Finally, you give the last ticket to Mike, closing out your entire short position.

Now, who has tickets? Mike 1, ROP 6, and Redditors 8. Together 15 tickets. You and HFBuddy are out of their short position, even though 6 ROP and all 8 Redditors held on to their tickets and their long position for dear life.

Price had gone up from 5000 to 5100, so both you and HFbuddy have lost 800 each on their short, total of 1600, (while ABC and MSE (minus Mike plus one ROP)) each made 100, being long, total of 1600.

Now the hype dies down. Nobody wants the tickets anymore, and now Mike, 6 ROP, and the 8 Redditors have to go to the concert.

The Redditors don't really want to go to the concert, they were in it for the LOLs. So now they're trying to sell. Couple of original MSE and ABC say, yeah, I'd be willing to see the band, but I'll only pay 100$ for the ticket.

Redditors lose their shirt, or go to see the concert.

(That's being long term share holder. :)